If interest rates remain 'higher for longer,' the winners are those with cash accounts

Published On Dec 27, 2024, 12:38 PM

The Federal Reserve has indicated that interest rates will likely remain high for an extended period, which will positively impact those with cash accounts, such as high-yield savings accounts and money market funds. Yields on these accounts are expected to rise significantly as the Fed adjusts its rates in response to inflation. Investors with cash reserves in these accounts are likely to benefit in 2025, similar to the gains seen in 2024. However, the high interest rates may also lead to increased borrowing costs for consumers.